European University Institute, Florence. E-mail: alexander.muravyev@iue.it

¹I am grateful to Revold Entov, Sergey Guriev, Boris Kuznetsov, Peter Oppenheimer and Mark Schaffer for their comments and helpful suggestions. All remaining mistakes are my own.

Abstract

This paper studies determinants of CEO turnover in Russian privatised enterprises using data from a recent survey of 437 firms. Its main finding is an inverse relationship between past performance of firms (measured by labour productivity) and the probability of their CEO replacement. The paper also shows that insider ownership inhibits CEO turnover, while both state and private outside ownership are associated with higher turnover rates. Moreover, the greater the share of regional governments in company's equity, the stronger the performance–turnover relationship. The impact of board composition on CEO turnover is less pronounced. However, there is evidence that smaller boards strengthen the performance–turnover relationship. There is also evidence that CEO turnover is positively related to control changes as well as financial difficulties of companies.